Audit of the BOP Annual Financial Statements Fiscal Year 2019
63
Office of the Inspector General U.S. Department of Justice OVERSIGHT ★ INTEGRITY ★ GUIDANCE Audit of the Federal Bureau of Prisons Annual Financial Statements Fiscal Year 2019 Audit Division 20-015 December 2019
Audit of the BOP Annual Financial Statements Fiscal Year 2019
Audit of the BOP Annual Financial Statements Fiscal Year
2019OVERSIGHT INTEGRITY GUIDANCE
Audit of the
Audit Division 20-015 December 2019
Commentary and Summary Audit of the Federal Bureau of Prisons
Annual Financial Statements Fiscal Year 2019
Objective
In support of the Department of Justice’s annual financial
statements audit, the Office of the Inspector General (OIG)
contracted with an independent auditor to perform an audit of the
Federal Bureau of Prisons (BOP) annual financial statements.
The objectives of the audit are to opine on the financial
statements, report on internal control over financial reporting,
and report on compliance and other matters, including compliance
with the Federal Financial Management Improvement Act of 1996
(FFMIA).
Results in Brief
KPMG LLP (KPMG) found that the BOP’s financial statements are
fairly presented as of and for the year ended September 30, 2019.
An unmodified opinion was issued. The Independent Auditors’ Report
did not report any material weaknesses or instances of
non-compliance.
The OIG reviewed KPMG’s report and related documentation and made
necessary inquiries of its representatives. Our review, as
differentiated from an audit in accordance with Government Auditing
Standards, was not intended to enable us to express, and we do not
express, an opinion on the BOP’s financial statements, conclusions
about the effectiveness of internal control, conclusions on whether
the BOP’s financial management systems substantially complied with
FFMIA, or conclusions on compliance and other matters. KPMG is
responsible for the attached auditors’ report dated November 5,
2019, and the conclusions expressed in the report. However, our
review disclosed no instances where KPMG did not comply, in all
material respects, with auditing standards generally accepted in
the United States of America.
Recommendations
Audit Results
Under the direction of the OIG, KPMG performed the BOP’s audit in
accordance with auditing standards generally accepted in the United
States of America. The fiscal year (FY) 2019 audit resulted in an
unmodified opinion on the financial statements. An unmodified
opinion means that the financial statements present fairly, in all
material respects, the financial position and the results of the
entity’s operations in accordance with U.S. generally accepted
accounting principles. For FY 2018, the BOP also received an
unmodified opinion on its financial statements (OIG Audit Division
Report No. 19-06).
KPMG neither identified any material weaknesses, nor reported any
significant deficiencies in the FY 2019 Independent Auditors’
Report.
No instances of non-compliance or other matters were identified
during the audit that are required to be reported under Government
Auditing Standards. Additionally, KPMG’s tests disclosed no
instances in which the BOP’s financial management systems did not
substantially comply with FFMIA.
i
ANNUAL FINANCIAL STATEMENTS FISCAL YEAR 2019
TABLE OF CONTENTS
INDEPENDENT AUDITORS'
REPORT................................................................
13
Consolidated Balance Sheets
...............................................................
17
Notes to the Principal Financial Statements
........................................... 22
REQUIRED SUPPLEMENTARY INFORMATION
Consolidated Deferred Maintenance and
Repairs..................................... 53
Combining Statements of Budgetary Resources Broken Down by Major
Budget Account
..........................................................................
54
OTHER INFORMATION
Treasury Symbol
Matrix......................................................................
57
Prisoner Capacity
Requirements...........................................................
58
U.S. DEPARTMENT OF JUSTICE
Management’s Discussion & Analysis
MISSION
It is the mission of the Federal Bureau of Prisons to protect
society by confining offenders in the controlled environments of
prisons and community-based facilities that are safe, humane, cost-
efficient, and appropriately secure, and that provide work and
other self-improvement opportunities to assist offenders in
becoming law-abiding citizens.
ORGANIZATION STRUCTURE
The Bureau of Prisons (BOP) encompasses the activities of the Trust
Fund and appropriated activities. It does not include the Federal
Prison Industries, Inc. (FPI) (also called UNICOR) which is a
separate reporting component of the Department of Justice
(Department or DOJ).
As of September 30, 2019, the BOP was comprised of 122
institutions, six regional offices, two staff training centers, 22
Residential Reentry Management field offices, and a Central Office,
or headquarters, in Washington, D.C. The Executive Office of the
Director provides overall direction for agency operations, with ten
central office divisions, each led by a member of the BOP’s
Executive Staff, providing operational and policy direction. The
Central Office manages the security and correctional operations of
the BOP, medical and psychiatric programs, and food and nutritional
programs. Additionally, the Central Office plans for the
acquisition, construction, and staffing of new facilities; and
oversees budget development and execution, contracting, property
management, and financial management. Additional operational
support and direction are provided for residential reentry
management and detention programs, legal counsel, public affairs,
information resources, and human resources management.
The National Institute of Corrections (NIC) provides technical
assistance and training for state and local correctional agencies
across the nation. The NIC supports the BOP’s goal of building
partnerships with community, state, local, and other entities. The
Program Review Division (PRD) performs oversight of the BOP's
programs through a rigorous review process that measures program
effectiveness and adequacy of internal controls. The Administration
Division (ADM) provides resources and support for the BOP to
perform effectively and efficiently. This includes the development
of budget requests; the stewardship of financial resources;
procurement and property management; the coordination and analysis
of information related to capacity; the selection of sites for new
prison construction; the design and construction of new
correctional facilities; and the renovation and maintenance of
existing facilities. The Correctional Programs Division (CPD)
develops activities and programs designed to appropriately classify
inmates, eliminate inmate idleness, and develop the skills
necessary to facilitate the successful reintegration of inmates
into their communities upon release. The Health
Bureau of Prisons
Management’s Discussion & Analysis
Services Division (HSD) has responsibilities in health care,
occupational safety and environmental health, and food services.
The health care mission is to deliver necessary health care to
inmates. The occupational safety and environmental health mission
is to provide a safe and healthy environment for staff and inmates.
The food service mission is to provide healthy and appetizing meals
that meet the needs of the general population. The Human Resource
Management Division (HRMD) is designed to oversee and administer
personnel policy and programs developed to address the needs of the
BOP employees covering all areas of personnel management. The
Industries Division encompasses FPI and vocational training
programming. The Information, Policy and Public Affairs Division
(IPPA) collects, develops, and disseminates useful, accurate, and
timely information to the BOP staff, the DOJ, Congress, other
government agencies, and the public. The Office of General Counsel
(OGC) provides effective legal advice, assistance, and
representation to officials of the Federal Bureau of Prisons. The
Reentry Services Division (RSD) enhances oversight and direction
for the critical area of offender reentry. Within the RSD is the
Education and Recreation Services Branch, who oversees the BOP's
recreation and education programs. The RSD prepares inmates for
reentry by focusing on reentry programming and community resource
transition, thereby increasing public safety.
The Trust Fund was created in the early 1930s to allow inmates a
means to purchase additional products and services above the
necessities provided by appropriated Federal funds (e.g., personal
grooming products, snacks, postage stamps, telephone services, and
electronic messaging). The Trust Fund is a self-sustaining trust
revolving fund account that is funded through sales of goods and
services to inmates.
The BOP is subdivided into six geographical regions (see Attachment
A), each managed by a Regional Director. Regions are staffed with
personnel who provide operational guidance and support to the field
locations in management and administrative areas such as financial
management, budgeting, technical assistance, personnel, and
correctional management.
In fiscal year (FY) 2019, the BOP operated 122 institutions
spanning four main security levels in its efforts to provide secure
and cost effective housing to a broad spectrum of offenders.
Institutions are assigned a security classification based in part
on the physical design of each facility. The four security levels
are minimum, low, medium, and high. In addition, administrative
facilities are institutions with special missions, including:
detention of non- citizen or pretrial offenders, treatment of
inmates with serious or chronic medical problems, and containment
of extremely violent or dangerous inmates. Administrative
facilities are capable of housing inmates of all security
categories.
Bureau of Prisons
FINANCIAL STRUCTURE
The BOP was provided two appropriations by Congress for FY 2019:
Salaries and Expenses and Buildings and Facilities. The Salaries
and Expenses (S&E) portion includes annual, multi- year, and
no-year appropriations, while Buildings and Facilities (B&F) is
a no-year appropriation. The Trust Fund is not appropriated and
receives spending authority from offsetting collections for revenue
earned through the sale of goods and services.
The S&E appropriations are annual, multi-year, and no-year
appropriations that support costs associated with the care and
custody of all Federal offenders in Federal institutions and
contract facilities, and the maintenance and operational costs
associated with the upkeep of Federal facilities, regional offices,
staff training centers, and administrative offices.
The B&F appropriation is a no-year appropriation that supports
site planning, acquisition, and construction of new facilities. The
B&F appropriation also supports the remodeling, renovating, and
equipping of existing facilities for penal and correctional
use.
FY 2019 RESOURCE INFORMATION
Tables 1 and 2 summarize the activity on the BOP’s Consolidated
Statements of Changes in Net Position and Consolidated Statements
of Net Cost. The tables show the funds provided to the BOP for the
fiscal years ended September 30, 2019 and 2018 for the purpose of
achieving the strategic goals.
Table 1. Source of BOP Resources (Dollars in Thousands)
Source FY 2019 FY 2018 Change % Earned Revenue $ 373,243 $ 388,204
-4% Budgetary Financing Sources Appropriations Received 7,542,400
7,325,571 3% Appropriations Transferred-In/Out (15,946) (6,399)
149% Other Adjustments (105) (134) -22% Other Financing Sources
Donations and Forfeitures of Property 1 1 0% Transfers-In/Out
Without Reimbursement - 7,150 -100% Imputed Financing 300,890
268,328 12%
Total BOP Resources $ 8,200,483 $ 7,982,721 3%
Bureau of Prisons
Table 2. How BOP Resources are spent (Dollars in Thousands)
Strategic Goal (SG) FY 2019 FY 2018 Change % SG 3: Reduce Violent
Crime and Promote Public Safety
Gross Cost $ 8,036,112 $ 7,904,656 Less: Earned Revenue 373,243
388,204
Net Cost
2%
Less: Total Earned Revenue 373,243 388,204 Total Net Cost of
Operations $7,662,869 $7,516,452 2%
ANALYSIS OF FINANCIAL STATEMENTS
Highlights of the financial and budgetary information presented in
the financial statements follows.
Assets: The BOP’s Consolidated Balance Sheets as of September 30,
2019, shows $7.286 billion in total assets, an increase of $257
million from the previous year’s total assets of $7.029 billion.
General Property, Plant and Equipment, Net was $4.784 billion,
which represents 66 percent of total assets.
Liabilities: The BOP’s Consolidated Balance Sheets as of September
30, 2019, shows $2.728 billion in total liabilities, an increase of
$93 million from the previous year’s total liabilities of $2.635
billion. Actuarial Federal Employee’s Compensation Act Liabilities
(FECA) liabilities were $1.115 billion and Accounts Payable was
$503 million, which represents 41 percent and 18 percent of total
liabilities, respectively.
Net Cost of Operations: The BOP’s Consolidated Statements of Net
Cost presents the BOP’s gross and net cost by Strategic Goal 3. The
net cost of the BOP’s operations totaled $7.663 billion for the
fiscal year ended September 30, 2019, an increase of $147 million
from the previous year’s net cost of operations of $7.516
billion.
Consistent with the Government Performance and Results Act (GPRA)
requiring agencies to prepare strategic plans covering five years,
at least every three years, the BOP has a formal strategic planning
process that feeds into the Department’s strategic plan. The BOP
sets goals, measures performance, and reports annually on its
actual performance compared to its goals. The Office of Management
and Budget (OMB) Circular A-136, Financial Reporting Requirements,
and the Statement of Federal Financial Accounting Standard (SFFAS)
No. 15, Management’s Discussion and Analysis – Standards, require
agencies to present the most significant performance measures
related to information on major goals from the agency’s strategic
plan.
Bureau of Prisons
Management’s Discussion & Analysis
The gross costs and earned revenues are allocated to the DOJ’s
Strategic Goal 3, “Reduce Violent Crime and Promote Public
Safety.”
2019 Financial Highlights
Strategic Goal 3: Reduce Violent Crime and Promote Public
Safety
Through strict adherence to its mission, the BOP conducts its
incarcerations function using a range of BOP operated correctional
institutions of varying security levels. The BOP also utilizes
privately operated facilities, which include residential reentry
centers. Collaborating with various law enforcement entities, the
BOP engages with numerous task forces such as National Gang
Intelligence, National Joint Terrorism, Correctional Intelligence,
and other intelligence gathering and sharing efforts. Through the
NIC, the BOP provides assistance to international, Federal, state,
and local correctional agencies. BOP staff are responsible for
planning, monitoring, and providing the delivery of programs and
services that appropriately evaluate inmates, assess risk, and
promote the skills necessary to facilitate the successful
reintegration in their communities upon release.
FY 2019 REPORT ON SELECTED RESULTS
STRATEGIC GOAL 3: Reduce Violent Crime and Promote Public Safety.
100 percent of the BOP’s Net Costs support this Goal.
ANALYSIS OF SYSTEMS, CONTROLS, AND LEGAL COMPLIANCE
Federal Managers’ Financial Integrity Act of 1982
The Federal Managers’ Financial Integrity Act (Integrity Act or
FMFIA) of 1982 provides the statutory basis for Management’s
responsibility for and assessment of internal accounting and
administrative controls. Such controls include program,
operational, and administrative areas, as well as accounting and
financial management. The Integrity Act requires Federal agencies
to establish controls that reasonably ensure obligations and costs
are in compliance with applicable laws; funds, property, and other
assets are safeguarded against waste, loss, unauthorized use, or
misappropriation; and revenues and expenditures are properly
recorded and accounted for to maintain accountability over the
assets. The Integrity Act also requires agencies to annually assess
and report on the internal controls that protect the integrity of
Federal programs (FMFIA Section 2) and whether financial management
systems conform to related requirements (FMFIA Section 4).
Bureau of Prisons
Management's Discussion & Analysis
Guidance for implementing the Integrity Act is provided through OMB
Circular A-123, Management’s Responsibility for Internal Control.
In addition to requiring agencies to provide an assurance statement
on the effectiveness of programmatic internal controls and
conformance with financial systems requirements, the Circular
requires agencies to provide an assurance statement on the
effectiveness of internal control over financial reporting. The
Department requires components to provide both of the assurance
statements in order to have the information necessary to prepare
the agency assurance statements.
FMFIA Assurance Statement
The Director of the BOP provides Reasonable Assurance that
Management controls and financial systems met the objectives of
Sections 2 and 4 of the FMFIA. In accordance with Appendix A of OMB
Circular A-123, the BOP conducted its assessment of the
effectiveness of internal control over financial reporting, which
includes the safeguarding of assets and compliance with applicable
laws and regulations. Based on the results of this assessment, the
BOP can provide reasonable assurance that its internal control over
financial reporting was operating effectively as of September 30,
2019, and the assessment identified no material weaknesses in the
design or operations of the controls.
Controls
The BOP has a management control and financial management systems
review program as required by the FMFIA. The PRD facilitates,
monitors, and evaluates the BOP’s implementation of the FMFIA by
coordinating management assessments, thereby providing a quality
assurance mechanism for the program review process. The PRD
conducts reviews that examine compliance with laws, regulations,
and policy for all BOP programs. In addition, reviews examine the
adequacy of controls, efficiency of operations, and effectiveness
in achieving program results. During fiscal years 2019 and 2018, 27
and 36 Financial Management Program Reviews, respectively, were
conducted at institutions, regional offices and the Central Office.
The reviews covered the areas of Accounting, Budgeting, Laundry,
Financial Organizations, Property Management, Commissary, and
Warehouse.
Systems
For FY 2019, the BOP’s official reports were generated from the
Financial Management Information System (FMIS) General Ledger, Cost
Reporting, and Expenditure and Allotment reporting facilities. The
FMIS General Ledger is supported by the following other systems:
SENTRY Property Management System; SENTRY Real Property Management
System; Trust Fund Accounting and Commissary System; and National
Finance Center Payroll System.
Bureau of Prisons
Improper Payments
The Improper Payments Information Act of 2002 (IPIA), as amended by
the Improper Payments Elimination and Recovery Act of 2010 (IPERA),
requires a risk assessment for all programs to identify those that
are susceptible to significant erroneous payments. Significant
erroneous payments are defined by the OMB as annual erroneous
payments in a program exceeding both 1.5 percent of program
payments and $10 million. The BOP provides improper payments
reporting on a quarterly basis in compliance with DOJ
requirements.
FMFIA Section 2 – Material Weaknesses
The Bureau of Prisons’ Management is responsible for establishing
and maintaining effective internal control and financial management
systems that meet the objectives of the FMFIA. The BOP assessed its
internal controls over the effectiveness and efficiency of
operations and compliance with the applicable laws and regulations
in accordance with OMB Circular A-123 as required by Section 2 of
the FMFIA. Based on the results of this assessment, the BOP can
provide reasonable assurance that its internal control over the
effectiveness and efficiency of operations and compliance with
applicable laws and regulations as of September 30, 2019, was
operating effectively.
FMFIA Section 4 – Material Nonconformances
The Bureau of Prisons’ Management is responsible for ensuring
compliance with applicable laws and regulations. To ensure
compliance, reviews are performed as discussed above. Specifically,
the BOP performed a review of its financial management systems
pursuant to Section 4 provisions of the FMFIA. No significant
financial management nonconformance was found in this review.
Federal Financial Management Improvement Act of 1996
The Federal Financial Management Improvement Act of 1996 (FFMIA)
was designed to advance Federal financial management by ensuring
that Federal financial management systems provide accurate,
reliable, and timely financial management information to the
Government’s managers. Compliance with the FFMIA provides the basis
for the continuing use of reliable financial management information
by program managers, as well as by the President, Congress, and
public. The FFMIA requires agencies to have financial management
systems that substantially comply with Federal financial management
systems requirements, applicable Federal accounting standards, and
the application of the U.S. Standard General Ledger (USSGL) at the
transaction level. Furthermore, the Act requires independent
auditors to report on agency compliance with the three requirements
in the financial statement audit report. The Federal Information
Security Management Act (FISMA) states that to be substantially
compliant with FFMIA, there are to be no significant deficiencies
in information security policies, procedures or practices.
Bureau of Prisons
Management's Discussion & Analysis
FFMIA Compliance Determination
During FY 2019, the BOP assessed its financial management systems
for compliance with the FFMIA and determined that, when taken as a
whole, they substantially comply with FFMIA. This determination is
based on the results of FISMA reviews and testing performed for OMB
Circular A-123, Appendix A. Consideration was also given to any
issues identified during the BOP’s financial statement audit.
IMPROPER PAYMENTS INFORMATION ACT OF 2002, AS AMENDED
In accordance with OMB Circular A-123, Appendix C, Requirements for
Payment Integrity Improvement, and the Departmental guidance for
implementing the IPIA, as amended, the Department implemented a
top-down approach to assess the risk of significant improper
payments across all five of the Department’s mission-aligned
programs, and to identify and recapture improper payments through a
payment recapture audit program. The approach promotes consistency
across the Department and enhances internal control related to
preventing, detecting, and recovering improper payments. Because of
the OMB requirement to assess risk and report payment recapture
audit activities by agency programs, the results of the
Department’s risk assessment and recapture activities are reported
at the Department-level only.
In accordance with the Departmental approach for implementing IPIA,
as amended, the BOP assessed its activities for susceptibility to
significant improper payments and conducted its payment recapture
audit program. The BOP provided the results of both the risk
assessment and payment recapture audit activities to the Department
for the Department-level reporting in the FY 2019 Agency Financial
Report.
FORWARD LOOKING INFORMATION
Crowding in Federal Prisons
As the nation’s largest correctional agency, the BOP is responsible
for the incarceration of approximately 180,000 inmates. In 2013,
system-wide crowding reached its highest level of nearly 40 percent
with total inmate population of approximately 220,000. While the
inmate population and system-wide crowding has decreased in recent
years, many of the challenges affecting the BOP today still relate
to system-wide crowding. As of September 30, 2019, BOP’s inmate
population was 177,214 and overall system-wide crowding was 12
percent. However, crowding at low and medium security institutions
were 21 and 20 percent, respectively. The BOP continues to rely on
funding to expand existing institutions and acquire, construct, and
activate new institutions to help manage its inmate population and
reduce system-wide crowding.
Bureau of Prisons
Aging of Correctional Facilities
Approximately 30 percent of the BOP’s 122 institutions are over 50
years old and 45 percent are over 30 years old. Prison facilities
are subject to greater than normal wear and tear as they are
continuously operated. Older facilities tend to require repairs to
infrastructure systems pertaining to water, sewer, electrical,
HVAC, alarm systems, fences, roofs, etc. These older facilities
present higher needs for repair and renovation than newer
facilities and consume a large portion of the BOP’s maintenance and
repair (M&R) resources.
The BOP monitors facility requests for major M&R projects,
capital improvements or upgrades. Institution requests are sent to
regional offices and evaluated by need. In order to maintain safe
and secure facilities, the BOP prioritizes its major M&R
projects, capital improvements, or upgrades to ensure the most
critical are funded first. Failure to adequately support aging
infrastructures annually increases costs in future years for
accomplishing the necessary maintenance and repairs.
LIMITATIONS OF THE FINANCIAL STATEMENTS
• The principal financial statements have been prepared to report
the financial position and results of operations of the BOP,
pursuant to the requirements of 31 U.S.C. 3515(b).
• While the statements have been prepared from the books and
records of the BOP in accordance with U.S. generally accepted
accounting principles (GAAP) for Federal entities and the formats
prescribed by OMB, the statements are in addition to the financial
reports used to monitor and control budgetary resources which are
prepared from the same books and records.
• The statements should be read with the realization that they are
for a component of the U.S. Government, a sovereign entity.
Bureau of Prisons
FCC A.11,a,.-ood -Ha\t/L URG FCC Be!lllCW~t - H!M/L
FCC Butner - M!MILIMed FCC Co!l!man - Hl'RIM>1. FCC Pl.orenre
-ADM/RJM FCC F-orrest C~• - M1L FCC Haze • . oa-H1MfSFF FCC
Lon:JJOc - MIL FCC Oak<Llla - UL FCC Pemstrnrg - MIL FCC Poilocl
- H1M FCC Terre Ha.me - BJM
·· l;{_QNO:!.UW FCC Tucsoa - H1M .."tt> FCC \tic!omlll! -
ID),!}M
FCC Y,azoo Ci<}• - H1'M.IL 1/tAJ>
~ ~-H
•& ~tOFFK:E.~-ENJRAl.t>FRCE. Medimn - M Low - L o--~..,..,.
Medica.l - Med ADMAX - ADM& <HFEl n•=--e FEDERAL
""-""R""""'- iN011~
.. FfllERAl- CAMJ"(STA>ID AL<lt,EJ
h tSAm.WF U:WSECl#¥1YFAt:ttff¥
f :,.-:,.-:1 1WE!IEANR£.<Ji0.~ l£1E.'IT•••<FA""'-1118
j)ilOleAll>UitK:ErO) ....0.,, fEDERALllEDilCAf. C:fHfE'R 1¥/M
-™"""""'- "Ei:li<W (£1 JSEDE>IAL - CCII.Pt.EXE&·
j:•§:•<:j oaurHeB/J"R,UIIHI/OM I ACTIVATION P'ROOES.S-:
il!m """"""'•r- TIIOMS~ IL -AD STRATll/E IGti
,.,..,_,m_.NPICIIHI/OM
l:1:J:1·~• .f«MDEA!f" REffi'0N GUAVNABO. P. l'lc
PRISONWORKCAMPSlOCArEDwm1HJGHERSECURITYFACllfflES.ANDCOllll"!.Ell'.ES(SAlcillTECAIIIPSJ:
A!.JCa'JLLE, Al;ASHlAND; KY; AnAHTA. GA° Al'WA~ CA; BASmoP; UC;
BEAUIIONT. UC; BEOKLEY, WV; !iEH ETSl/lLLE; ~ ,B.ERLl!'(. NH;!IJG:
SP-RING, n:; llfG SANDY. KY;· !il/TNER. l'IC; CAl'illAN;, PA;
CARSM'R.l. n:; C0!.1311.AH. R; Ctlll!!iERlAND, MD; DANBURY. CT;
llE'IIEHS, .lilA;Dl!B.t.lH, CA; .EDGffiB.!l; SC; EL RENO, OK;
ENG!.EWOOO; 00; ESTILJ., SC; FAllrrON;, NJ; FLORENCE. CO; FORREST
CITY, AF!,: FO!n"llll)(, NJ; G.lt:MER. WV; GFIEEH~ rl.; HAZEi. TON,
WV; HERLONG, CA. JESUP. GA,: LA TIJNA, IX; !.EAVEIM'ORTH, KS; LEE;
VA; LEM'ISSURG;, PA; lf)(IHGTON; KY; ialtPOC, CA; LO\l!ETTO; P:A.
MANCHESTER. K Y; MARIANNA, FL,· MAl'l:ION, It; IICCREA!ll', KY;
MCOOltR.L, WV; MCKEAN; PA; ,VEMPHJS. TH;,IIEHDOTA. CA; MIA.lilt
lit_: OAKDA!.E. t.A,; ons1.1L:LE; HY; OXFORD. I'll; PEKIIN, rl.;
PETERSBURG. VA; PHOENIX. Az; POLLOCK lA,: SCHYl.!LKll.L,, PA
SEAGOIIII.LE; TIC; SHERJDAN, OR: rALl.A!lEGA. AL, TERRE HAUTE. lit
TEXARKAHA. UC; fflREE Rl~S. TX; JHQVSONJl; IIJCrc>R\IIU.E. CA;
WIUlAMSBURG,, SC; YAZOO QJY.11-S.
OREAP9~~-I¥""'""""'"""" ~ 1a., :21)1D
1212
KPMG LLP is a Delaware limited liability partnership and the U.S.
member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity.
~
Director Federal Bureau of Prisons U.S. Department of Justice
Report on the Financial Statements We have audited the accompanying
consolidated financial statements of the U.S. Department of Justice
Federal Bureau of Prisons (BOP), which comprise the consolidated
balance sheets as of September 30, 2019, and 2018, and the related
consolidated statements of net cost and changes in net position,
and the combined statements of budgetary resources for the years
then ended, and the related notes to the consolidated financial
statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation
of these consolidated financial statements in accordance with U.S.
generally accepted accounting principles; this includes the design,
implementation, and maintenance of internal control relevant to the
preparation and fair presentation of consolidated financial
statements that are free from material misstatement, whether due to
fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these consolidated
financial statements based on our audits. We conducted our audits
in accordance with auditing standards generally accepted in the
United States of America, in accordance with the standards
applicable to financial audits contained in Government Auditing
Standards
issued by the Comptroller General of the United States, and in
accordance with Office of Management and Budget (OMB) Bulletin No.
19-03, Audit Requirements for Federal Financial Statements. Those
standards and OMB Bulletin No. 19-03 require that we plan and
perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the consolidated financial
statements. The procedures selected depend on the auditors’
judgment, including the assessment of the risks of material
misstatement of the consolidated financial statements, whether due
to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity’s preparation and
fair presentation of the consolidated financial statements in order
to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the entity’s internal control. Accordingly, we
express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness
of significant accounting estimates made by management, as well as
evaluating the overall presentation of the consolidated financial
statements.
We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
13
Opinion
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of the U.S. Department of Justice Federal Bureau of
Prisons as of September 30, 2019, and 2018, and its net costs,
changes in net position, and budgetary resources for the years then
ended in accordance with U.S. generally accepted accounting
principles.
Other Matters
Required Supplementary Information
U.S. generally accepted accounting principles require that the
information in the Management’s Discussion and Analysis and
Required Supplementary Information sections be presented to
supplement the basic consolidated financial statements. Such
information, although not a part of the basic consolidated
financial statements, is required by the Federal Accounting
Standards Advisory Board who considers it to be an essential part
of financial reporting for placing the basic consolidated financial
statements in an appropriate operational, economic, or historical
context. We have applied certain limited procedures to the required
supplementary information in accordance with auditing standards
generally accepted in the United States of America, which consisted
of inquiries of management about the methods of preparing the
information and comparing the information for consistency with
management’s responses to our inquiries, the basic consolidated
financial statements, and other knowledge we obtained during our
audits of the basic consolidated financial statements. We do not
express an opinion or provide any assurance on the information
because the limited procedures do not provide us with sufficient
evidence to express an opinion or provide any assurance.
Other Information
Our audits were conducted for the purpose of forming an opinion on
the basic consolidated financial statements as a whole. The
information in the Treasury Symbol Matrix, Prisoner Capacity
Requirements, and Operating Leases subsections of the Other
Information section is presented for purposes of additional
analysis and is not a required part of the basic consolidated
financial statements. Such information has not been subjected to
the auditing procedures applied in the audits of the basic
consolidated financial statements, and accordingly, we do not
express an opinion or provide any assurance on it.
Other Reporting Required by Government Auditing Standards
Internal Control over Financial Reporting
In planning and performing our audit of the consolidated financial
statements as of and for the year ended September 30, 2019, we
considered the BOP’s internal control over financial reporting
(internal control) to determine the audit procedures that are
appropriate in the circumstances for the purpose of expressing our
opinion on the consolidated financial statements, but not for the
purpose of expressing an opinion on the effectiveness of the BOP’s
internal control. Accordingly, we do not express an opinion on the
effectiveness of the BOP’s internal control. We did not test all
internal controls relevant to operating objectives as broadly
defined by the Federal Managers’ Financial Integrity Act of
1982.
A deficiency in internal control exists when the design or
operation of a control does not allow management or employees, in
the normal course of performing their assigned functions, to
prevent, or detect and correct, misstatements on a timely basis. A
material weakness is a deficiency, or a combination of
deficiencies, in internal control, such that there is a reasonable
possibility that a material misstatement of the entity’s financial
statements will not be prevented, or detected and corrected, on a
timely basis. A significant deficiency is a deficiency, or a
combination of deficiencies, in internal control that is less
severe than a material weakness, yet important enough to merit
attention by those charged with governance.
Our consideration of internal control was for the limited purpose
described in the first paragraph of this section and was not
designed to identify all deficiencies in internal control that
might be material weaknesses or
14
significant deficiencies. Given these limitations, during our audit
we did not identify any deficiencies in internal control that we
consider to be material weaknesses. However, material weaknesses
may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the BOP’s
consolidated financial statements as of and for the year ended
September 30, 2019 are free from material misstatement, we
performed tests of its compliance with certain provisions of laws,
regulations, and contracts, noncompliance with which could have a
direct and material effect on the determination of financial
statement amounts. However, providing an opinion on compliance with
those provisions was not an objective of our audit, and
accordingly, we do not express such an opinion. The results of our
tests disclosed no instances of noncompliance or other matters that
are required to be reported under Government Auditing Standards or
OMB Bulletin No. 19-03.
We also performed tests of the BOP’s compliance with certain
provisions referred to in Section 803(a) of the Federal Financial
Management Improvement Act of 1996 (FFMIA). Providing an opinion on
compliance with FFMIA was not an objective of our audit, and
accordingly, we do not express such an opinion. The results of our
tests disclosed no instances in which the BOP’s financial
management systems did not substantially comply with the (1)
federal financial management systems requirements, (2) applicable
federal accounting standards, and (3) the United States Government
Standard General Ledger at the transaction level.
Purpose of the Other Reporting Required by Government Auditing
Standards
The purpose of the communication described in the Other Reporting
Required by Government Auditing
Standards section is solely to describe the scope of our testing of
internal control and compliance and the results of that testing,
and not to provide an opinion on the effectiveness of the BOP’s
internal control or compliance. Accordingly, this communication is
not suitable for any other purpose.
Washington, D.C. November 5, 2019
15
NOTES
Consolidated Balance Sheets As of September 30, 2019 and 2018
Dollars in Thousands 2019 2018
ASSETS (Note 2) Intragovernmental
Fund Balance with Treasury (Note 3) $ 2,461,827 $ 2,087,125
Accounts Receivable (Note 6) 2,473 6,280 Other Assets (Note 9)
9,356 13,778
Total Intragovernmental 2,473,656 2,107,183
Cash and Other Monetary Assets (Note 4) 402 408 Accounts
Receivable, Net (Note 6) 4,063 9,863 Inventory and Related
Property, Net (Note 7) 19,486 19,011 General Property, Plant and
Equipment, Net (Note 8) 4,783,808 4,887,582 Advances and
Prepayments 4,616 4,769
Total Assets $ 7,286,031 $ 7,028,816
LIABILITIES (Note 10) Intragovernmental
Total Intragovernmental 336,489 348,222
Accounts Payable 404,468 346,516 Accrued Payroll and Benefits
129,976 113,487 Accrued Annual and Compensatory Leave Liabilities
189,304 176,553 Federal Employee and Veteran Benefits 1,115,065
1,134,980 Environmental and Disposal Liabilities (Note 11) 71,152
71,156 Deferred Revenue 818 703 Contingent Liabilities (Note 14)
13,535 44,599 Other Liabilities (Note 13) 467,175 398,922
Total Liabilities $ 2,727,982 $ 2,635,138
NET POSITION Unexpended Appropriations - All Other Funds $
1,640,246 $ 1,341,274 Cumulative Results of Operations - Funds from
Dedicated Collections (Note 15) 84,501 75,166 Cumulative Results of
Operations - All Other Funds 2,833,302 2,977,238
Total Net Position $ 4,558,049 $ 4,393,678
Total Liabilities and Net Position $ 7,286,031 $ 7,028,816
Bureau of Prisons The accompanying notes are an integral part of
these financial statements.
17
U.S. Department of Justice Bureau of Prisons
Consolidated Statements of Net Cost For the Fiscal Years Ended
September 30, 2019 and 2018
Dollars in Thousands
governmental Public Total Net Cost of Operations
Goal 3 2019 2018
Goal 3 Reduce Violent Crime and Promote Public Safety
Bureau of Prisons The accompanying notes are an integral part of
these financial statements.
18
Bureau of Prisons Consolidated Statements of Changes in Net
Position
For the Fiscal Year Ended September 30, 2019
Dollars in Thousands
2019
Total Budgetary Financing Sources - 298,972 298,972
Net Change - 298,972 298,972
Cumulative Results of Operations Beginning Balances $ 75,166 $
2,977,238 $ 3,052,404
Budgetary Financing Sources Appropriations Used - 7,227,377
7,227,377
Other Financing Sources (Nonexchange) Donations and Forfeitures of
Property - 1 1 Imputed Financing (Note 16) 6,497 294,393
300,890
Total Financing Sources 6,497 7,521,771 7,528,268
Net Cost of Operations 2,838 (7,665,707) (7,662,869)
Net Change 9,335 (143,936) (134,601)
Cumulative Results of Operations $ 84,501 $ 2,833,302 $
2,917,803
Net Position $ 84,501 $ 4,473,548 $ 4,558,049
Bureau of Prisons The accompanying notes are an integral part of
these financial statements.
19
U.S. Department of Justice Bureau of Prisons
Consolidated Statements of Changes in Net Position (continued) For
the Fiscal Year Ended September 30, 2018
Dollars in Thousands
- - - -
Net Change - 392,254 392,254
Cumulative Results of Operations Beginning Balances $ 67,120 $
3,299,473 $ 3,366,593
Budgetary Financing Sources Appropriations Used - 6,926,784
6,926,784
Other Financing Sources (Nonexchange) Donations and Forfeitures of
Property Transfers-In/Out Without Reimbursement Imputed Financing
(Note 16)
- -
Net Cost of Operations 2,721 (7,519,173) (7,516,452)
Net Change 8,046 (322,235) (314,189)
Cumulative Results of Operations $ 75,166 $ 2,977,238 $
3,052,404
Net Position $ 75,166 $ 4,318,512 $ 4,393,678
Bureau of Prisons The accompanying notes are an integral part of
these financial statements.
20
U.S. Department of Justice Bureau of Prisons
Combined Statements of Budgetary Resources For the Fiscal Years
Ended September 30, 2019 and 2018
Dollars in Thousands 2019 2018
Budgetary Resources: Unobligated Balance from Prior Year Budget
Authority, Net $ 1,027,361 $ 794,050 (discretionary and mandatory)
Appropriations (discretionary and mandatory) 7,542,400 7,325,571
Spending Authority from Offsetting Collections (discretionary
379,792 378,241 and mandatory)
Total Budgetary Resources $ 8,949,553 $ 8,497,862
Status of Budgetary Resources: New Obligations and Upward
Adjustments (Total) $ 7,755,047 $ 7,494,105 Unobligated Balance,
End of Year:
Apportioned, Unexpired Accounts 809,529 806,464 Exempt from
Apportionment, Unexpired Accounts 48,345 49,705 Unexpired
Unobligated Balance, End of Year 857,874 856,169 Expired
Unobligated Balance, End of Year 336,632 147,588
Unobligated Balance - End of Year (Total) 1,194,506 1,003,757 Total
Status of Budgetary Resources: $ 8,949,553 $ 8,497,862
Outlays, Net: Outlays, Net (Total) (discretionary and mandatory) $
7,158,542 $ 6,784,879 Less: Distributed Offsetting Receipts (-)
1,448 1,686 Agency Outlays, Net (discretionary and mandatory) $
7,157,094 $ 6,783,193
Bureau of Prisons The accompanying notes are an integral part of
these financial statements.
21
Bureau of Prisons Notes to the Principal Financial Statements
(Dollars in Thousands, Except as Noted)
1. Summary of Significant Accounting Policies
A. Reporting Entity
The U.S. Federal Bureau of Prisons (BOP) is a reporting entity
under the Department of Justice (DOJ) and encompasses the
appropriated activities of the BOP, as well as the activities of
the Trust Fund. It does not include the Federal Prison Industries,
Inc. (FPI) (also called UNICOR), which is a separate reporting
component under the DOJ.
The BOP protects society by confining offenders in the controlled
environments of prisons and community-based facilities that are
safe, humane, cost-efficient, and appropriately secure, and that
provide work and other self-improvement opportunities to assist
offenders in becoming law-abiding citizens.
The Trust Fund was created by two DOJ Orders, No. 2126 on April 1,
1930, and No. 2244 on January 1, 1932. The Trust Fund operates the
Commissary to provide inmates with the opportunity to procure
merchandise and services not ordinarily provided by the BOP. The
Trust Fund is a self-sustaining trust revolving fund account that
is funded through the sale of goods and services to inmates.
B. Basis of Presentation
These financial statements have been prepared to report the
financial position and results of operations of the BOP as required
by the Government Management Reform Act of 1994, Public Law
103-356, Section 108, Stat. 3515. These financial statements have
been prepared from the books and records of the BOP in accordance
with United States generally accepted accounting principles (GAAP)
issued by the Federal Accounting Standards Advisory Board (FASAB)
and presentation guidelines in the Office of Management and Budget
(OMB) Circular A-136, Financial Reporting Requirements. These
financial statements are different from the financial reports
prepared pursuant to OMB directives which are used to monitor and
control the use of the BOP budgetary resources. To ensure that the
BOP financial statements are meaningful at the entity level and to
enhance reporting consistency within the Department, Inventory and
Related Property, Other Assets, Federal Employee and Veteran
Benefits, and Other Liabilities as defined by OMB Circular A-136
have been disaggregated on the balance sheet. These include
Advances and Prepayments with the public, Accrued Federal
Employees’ Compensation Act (FECA) Liabilities, Accrued Payroll and
Benefits, Accrued Annual and Compensatory Leave Liabilities, and
Deferred Revenue.
Bureau of Prisons These notes are an integral part of these
financial statements.
22
1. Summary of Significant Accounting Policies (continued)
C. Basis of Consolidation
The consolidated/combined financial statements include the accounts
of the BOP. All significant proprietary intra-entity transactions
and balances have been eliminated in consolidation. The Statements
of Budgetary Resources are combined statements for the fiscal years
ended September 30, 2019, and 2018 and as such, intra-entity
transactions have not been eliminated.
D. Basis of Accounting
The financial statements have been prepared and transactions have
been recorded on the accrual and budgetary bases of accounting.
Under the accrual basis, revenues are recorded when earned and
expenses are recorded when incurred, regardless of when cash is
exchanged. Under the budgetary basis, however, funds availability
is recorded based upon legal considerations and constraints. As a
result, certain line items on the proprietary financial statements
may not equal similar line items on the budgetary financial
statements.
These statements were prepared in accordance with GAAP. GAAP for
Federal entities are the standards prescribed by the FASAB, which
is designated as the official accounting standards-setting body for
the Federal Government (Government) by the American Institute of
Certified Public Accountants (AICPA). The Statements of Federal
Financial Accounting Standards (SFFAS) that were in effect as of
September 30, 2019, were followed in the preparation of these
financial statements.
E. Non-Entity Assets
A portion of the BOP’s Fund Balance with the U.S. Treasury
(Treasury) and Accounts Receivable is accounted for as a Non-Entity
Asset and disclosed in Note 2. Non-Entity assets are assets held by
the BOP but are not available for use by the BOP. The majority of
non-entity assets are comprised of prisoner monies held in trust by
Treasury. This amount also includes certain receivables and
receipts of cash that are in suspense, clearing, deposit, or
general fund accounts. These transactions were processed by
commercial banks for deposit to fund accounts maintained at
Treasury.
F. Fund Balance with Treasury, and Cash and Other Monetary
Assets
Funds with Treasury represent appropriated and trust funds
available to pay current liabilities and finance future authorized
purchases. Certain receipts are processed by commercial banks for
deposit to the BOP appropriation or fund accounts. In addition, the
BOP has been granted and maintains imprest funds at many locations
that are also included in the BOP’s cash balance.
Bureau of Prisons These notes are an integral part of these
financial statements.
23
1. Summary of Significant Accounting Policies (continued)
G. Investments
Beginning in FY 1995, the Trust Fund was granted authority (Public
Law 103-317, Section 107) to invest funds in excess of operating
needs in securities guaranteed by Treasury. In November 1994, the
Trust Fund began participating in the Federal Investment Counseling
Program through Treasury. Treasury charges no commissions or
transaction fees for participating in the program. Investments are
made in any U.S. Government securities available to the
public.
H. Accounts Receivable
Accounts receivable are largely comprised of receivables with the
public. Net accounts receivable includes reimbursement and refunds
receivable due from Federal agencies and others, less the allowance
for uncollectible accounts. The BOP considers all accounts
receivable collectable, however, establishes an allowance for
uncollectible accounts when it is more likely than not that the
accounts receivable will not be collected.
I. Inventory and Related Property
The Trust Fund Commissary inventories are comprised of merchandise
on hand at 98 reporting sites located in the United States and
Puerto Rico. Inventories consist of merchandise that is either not
normally provided by the BOP or are of a different quality than is
regularly issued. Inventory sales are restricted to inmates and
consist primarily of foods and beverages, hobby craft items,
stamps, clothing, health and hygiene commodities, and other sundry
items.
The Trust Fund Commissary inventories are stated at latest
acquisition cost, which is adjusted using the Consumer Price Index
(CPI) for the year to approximate the value of the inventory under
the First-In-First-Out (FIFO) accounting methodology.
J. General Property, Plant and Equipment
The BOP owns the majority of land and buildings in which it
operates and capitalizes them on its records. Real property is
capitalized based upon the total acquisition cost. Depreciation is
applied to program areas based upon the percentage of space
occupied. Real property acquisitions equal to or greater than $100
thousand are capitalized. Real property acquisitions are
capitalized and depreciated by the automated SENTRY Real Property
Management System (SRPMS).
Bureau of Prisons These notes are an integral part of these
financial statements.
24
1. Summary of Significant Accounting Policies (continued)
J. General Property, Plant and Equipment (continued) Personal
property acquisitions are capitalized and depreciated by the
automated SENTRY Property Management System (SPMS). Physical
inventories are conducted annually and adjustments are made as
necessary. Any equipment with an acquisition cost of less than $50
thousand is expensed when purchased.
The following chart represents the maximum depreciation years for
BOP’s property:
BOP Depreciation Schedule Buildings Equipment Leasehold
Improvements Other Structures & Facilities Internal Use
Software Vehicles Assets Under Capital Lease
30 10 *
20 7 10 *
* Depreciation based on the lesser of the lease term or useful life
of the asset.
Except for land, all general Property, Plant and Equipment
(PP&E) is capitalized when the cost of acquiring or improving
the property meets the threshold noted in the table above and has a
useful life of two or more years. Land is capitalized regardless of
the acquisition cost. Except for land, all general PP&E is
depreciated or amortized, based on historical cost, using the
straight-line method over the estimated useful life of the
asset.
K. Advances and Prepayments
Advances and prepayments classified as assets of the BOP on the
balance sheet represent funds disbursed to individuals and other
organizations for which goods or services have not yet been
provided. This amount also includes the current balance of travel
advances, issued to Federal employees in advance of official
travel. Amounts issued are limited to per diem expenses expected to
be incurred by the employees during official travel. For Federal
employees who anticipate and plan for travel, advances are
permitted up to 80 percent of per diem. Actual reimbursements are
made at 100 percent of per diem. The BOP’s amount also includes
advances that arise whenever the BOP provides money to state and
local governmental agencies to fund correctional study programs.
Advances and prepayments involving other Federal agencies are
classified as other assets on the balance sheet and in Note 9,
Other Assets.
Bureau of Prisons These notes are an integral part of these
financial statements.
25
1. Summary of Significant Accounting Policies (continued)
L. Liabilities
Liabilities represent the monies or other resources that are likely
to be paid by the BOP as the result of a transaction or event that
has already occurred. However, no liability can be paid by the BOP
absent proper budget authority. Liabilities that are not funded by
the current year appropriation are classified as liabilities not
covered by budgetary resources in Note 10.
M. Contingencies and Commitments
The BOP is party to various administrative proceedings, legal
actions, and claims related to contract disputes, employee claims
under the Fair Labor Standards Act, and inmate claims under the
Federal Tort Claim Act and other legal matters. These claims are of
a nature considered normal for a Government law enforcement agency.
In accordance with SFFAS No. 5, Accounting for Liabilities of the
Federal Government and SFFAS No. 12, Recognition of Contingent
Liabilities from Litigation, the BOP has probable and reasonably
possible losses arising from litigation. The balance sheet includes
an estimated liability for those legal actions where Management and
the Chief Counsel consider adverse decisions “probable” and amounts
are reasonably estimable. Legal actions where Management and the
Chief Counsel consider adverse decisions “probable” or “reasonably
possible” and the amounts are reasonably estimable are disclosed in
Note 14, Contingencies and Commitments. However, there are cases
where amounts have not been accrued or disclosed because the
amounts of the potential loss cannot be estimated or the likelihood
of an unfavorable outcome is considered “remote.”
N. Annual, Sick, and Other Leave
Annual and compensatory leave is expensed with an offsetting
liability as it is earned and the corresponding liability is
reduced as leave is taken. Each year, the balance in the accrued
annual leave liability account is adjusted to reflect current pay
rates. To the extent current or prior year appropriations are not
available to fund annual and compensatory leave earned but not
taken; funding will be obtained from future financing sources. Sick
leave and other types of non-vested leave are expensed as
taken.
O. Interest on Late Payments
Pursuant to the Prompt Payment Act, 31 U.S.C. 3901-3907, Federal
agencies must pay interest on payments for goods or services made
to business concerns after the due date. The due date is generally
30 days after receipt of a proper invoice or acceptance of the
goods or services.
Bureau of Prisons These notes are an integral part of these
financial statements.
26
1. Summary of Significant Accounting Policies (continued)
P. Retirement Plans
With few exceptions, employees of the Department are covered by one
of the following retirement programs:
1. Employees hired before January 1, 1984, are covered by the Civil
Service Retirement System (CSRS). The BOP contributes 7 percent of
the gross pay for regular employees and 7.5 percent for law
enforcement officers.
2. Employees hired January 1, 1984 or later, are covered by the
Federal Employees Retirement System (FERS).
a. Employees hired January 1, 1984 through December 31, 2012, are
covered by the FERS. The BOP contributes 13.7 percent of the gross
pay for regular employees and 30.1 percent for law enforcement
officers.
b. Employees hired January 1, 2013 through December 31, 2013, are
covered by the Federal Employees Retirement System-Revised Annuity
Employees (FERS-RAE). The BOP contributes 11.9 percent of the gross
pay for regular employees and 28.4 percent for law enforcement
officers.
c. Employees hired January 1, 2014 or later are covered by the
Federal Employees Retirement System-Further Revised Annuity
Employees (FERS- FRAE). The BOP contributes 11.9 percent of the
gross pay for regular employees and 28.4 percent for law
enforcement officers.
All employees are eligible to contribute to the Federal Thrift
Savings Plan (TSP). For those employees covered by the FERS,
FERS-RAE and FERS-FRAE, a TSP account is automatically established
to which the BOP is required to contribute an additional 1 percent
of gross pay and match employee contributions up to 4 percent. No
Government contributions are made to the TSP accounts established
by the CSRS employees. The BOP does not report CSRS or FERS assets,
accumulated plan benefits, or unfunded liabilities, if any, which
may be applicable to its employees. Such reporting is the
responsibility of the Office of Personnel Management (OPM). SFFAS
No. 5 requires employing agencies to recognize the cost of pensions
and other retirement benefits during their employees’ active years
of service. Refer to Note 16 for additional details.
Bureau of Prisons These notes are an integral part of these
financial statements.
27
1. Summary of Significant Accounting Policies (continued)
Q. Federal Employee Compensation Benefits
The FECA provides income and medical cost protection to covered
Federal civilian employees injured on the job, employees who have
contracted a work-related occupational disease, and beneficiaries
of employees whose death is attributable to a job-related injury or
occupational disease. Claims incurred for benefits for BOP
employees under FECA are administered by the Department of Labor
(DOL) and are ultimately paid by the BOP. The total FECA liability
consists of an actuarial and an accrued portion as discussed
below.
Actuarial Liability: The DOL calculates the liability of the
Government for future compensation benefits, which includes the
expected liability for death, disability, medical, and other
approved costs. This method utilizes historical benefit payment
patterns related to a specified incurred period to predict the
ultimate payments related to that period. The projected annual
benefit payments were discounted to present value. The resulting
Government liability was then distributed by the agency. The DOJ
portion of this liability includes the estimated future cost of
death benefits, workers’ compensation, medical, and miscellaneous
cost for approved compensation cases for DOJ employees. The DOJ
allocates the liability to the BOP on the basis of actual payments
made to the FECA Special Benefits Fund (SBF) for the three prior
years as compared to the total DOJ payments made over the same
period.
The FECA actuarial liability is recorded for reporting purposes
only. This liability constitutes an extended future estimate of
cost, which will not be obligated against budgetary resources until
the fiscal year in which the cost is actually billed to the
DOJ.
Accrued Liability: The accrued FECA liability is the difference
between the FECA benefits paid by the FECA SBF and the agency’s
actual cash payments to the FECA SBF. For example, the FECA SBF
will pay benefits on behalf of an agency through the current year.
However, most agencies’ actual cash payments during the current
year to the FECA SBF will reimburse the FECA SBF for benefits paid
through a prior fiscal year. The difference between these two
amounts is the accrued FECA liability.
Bureau of Prisons These notes are an integral part of these
financial statements.
28
1. Summary of Significant Accounting Policies (continued)
R. Intragovernmental Activity
Intragovernmental costs and exchange revenue represent transactions
made between two reporting entities within the Government. Costs
and earned revenues with the public represent exchange transactions
made between the reporting entity and a non-Federal entity. The
classification of revenue or cost as “intragovernmental” or “with
the public” is defined on a transaction-by-transaction basis. The
purpose of this classification is to enable the Government to
prepare consolidated financial statements, not to match public and
intragovernmental revenue with the costs incurred to produce public
and intragovernmental revenue.
S. Revenues and Other Financing Sources
The BOP receives annual, multi-year, and no-year appropriations
that may be used, within statutory limits, for operating and
capital expenditures to support its programs. Appropriations are
recognized as budgetary financing sources at the time the related
program or administrative expenses are accrued. Additional amounts
are obtained through reimbursements for services and donated
property.
The BOP receives the majority of its exchange revenues for daily
care, maintenance, and housing of state and local offenders; meals
purchased by BOP staff; rental of staff housing on institution
premises; utilities used by the FPI; purchase card rebates; and
recycling income.
The amount billed to house state prisoners is based on the average
inmate per capita rate for the security level of the institution
where the prisoner is housed. The price of meal tickets for
institution employees is calculated using the annual per capita
cost for providing meals to inmates. Rental rates for employee
housing on institution premises are calculated using the Regional
Survey Method: base rental rates are established by means of a
series of economic models that utilize typical rates for comparable
private rental housing in the established communities nearest to
the sites in which the quarters are located. The amount charged for
steam purchased by the FPI is a calculation based on actual charges
incurred by the BOP during the production of the utility provided.
Purchase card rebates are calculated based on productivity and
sales. Recycling income is based on the weight and/or volume of
material being recycled.
Bureau of Prisons These notes are an integral part of these
financial statements.
29
1. Summary of Significant Accounting Policies (continued)
S. Revenues and Other Financing Sources (continued)
Trust Fund profits are utilized for continued operations and
programs that benefit the inmate population. The Trust Fund
receives no appropriated funds. The Trust Fund receives the
majority of its funding through revenues generated by the sale of
merchandise, telephone services, electronic messaging through the
Trust Fund Limited Inmate Computer System (TRULINCS). TRULINCS was
fully implemented as of February 2011, and provides inmates with
some limited computer access. TRULINCS is funded completely by the
Trust Fund. Regular items sold through the institution commissaries
are marked-up 30 percent from their per unit cost. They are then
rounded to the nearest nickel to determine selling price. In rare
instances when taxes (whether state, local, or Federal) are
included, the per unit tax amount is added to the marked-up price
before rounding. Should the selling price ever exceed the
manufacturer’s printed price, the printed price shall be set even
if it is on odd cents.
The Trust Fund also earned other revenue from medical co-payments,
vendor commissions/ revenue share, and recycling income. As of
March 2004, friends and family members are able to send money to
inmates electronically. Funds are deposited directly to an inmate’s
account within a few hours. A commission based on transaction
volume is received from the vendor. As of October 2005, inmates pay
a $2 per visit co-pay for in-house medical appointments.
Twenty-five percent of the co-pay is retained by the Trust Fund and
the remainder is paid to the Office of Justice Programs Crime
Victims Fund. Trust Fund Debit Card Vending has been limited to the
sale of credits through the commissary for services such as copies
and the use of washer and dryers. Trust Fund revenue also includes
investment income.
The Trust Fund has deferred revenue for the inmate Telephone
System, which includes the amount of phone credits that have not
been used as of September 30, 2019.
T. Funds from Dedicated Collections
SFFAS No. 43, Funds from Dedicated Collections: Amending Statement
of Federal Financial Accounting Standards 27, Identifying and
Reporting Earmarked Funds, defines funds from dedicated collections
as financed by specifically identified revenues, provided to the
Government by non-Federal sources, often supplemented by other
financing sources, which remain available over time. These
specifically identified revenues and other financing sources are
required by statute to be used for designated activities, benefits,
or purposes, and must be accounted for separately from the
Government’s general revenues.
Bureau of Prisons These notes are an integral part of these
financial statements.
30
1. Summary of Significant Accounting Policies (continued)
T. Funds from Dedicated Collections (continued)
The three required criteria for a fund from dedicated collections
are:
1. A statute committing the Government to use specifically
identified revenues and/or other financing sources that are
originally provided to the Government by a non- Federal source only
for designated activities, benefits, or purposes;
2. Explicit authority for the fund to retain revenues and/or other
financing sources not used in the current period for future use to
finance the designated activities, benefits, or purposes; and
3. A requirement to account for and report on the receipt, use, and
retention of the revenues and/or other financing sources that
distinguishes the fund from the Government’s general
revenues.
The following fund meets the definition of funds from dedicated
collections: Trust Fund – 15X8408.
U. Allocation Transfer of Appropriations
The BOP is a party to allocation transfers with another Federal
agency as a transferring (parent) entity. Allocation transfers are
legal delegations by one department of its authority to obligate
budget authority and outlay funds to another department. Generally,
all financial activity related to these allocation transfers (e.g.,
budget authority, obligations, outlays) is reported in the
financial statements of the parent entity, from which the
underlying legislative authority, appropriations, and budget
apportionments are derived.
The BOP allocates funds to the Public Health Service (PHS). The PHS
provides a portion of the medical treatment for Federal inmates.
Money is transferred from the BOP to PHS, and is designated and
expended for current year obligations of PHS staff salaries,
benefits, and applicable relocation expenses. The amounts
transferred to PHS from the BOP totaled $107 million for both
fiscal years ended September 30, 2019 and 2018.
V. Tax Exempt Status
As an agency of the Government, the BOP is exempt from all income
taxes imposed by any governing body whether it is a Federal, state,
commonwealth, local, or foreign government.
Bureau of Prisons These notes are an integral part of these
financial statements.
31
1. Summary of Significant Accounting Policies (continued)
W. Use of Estimates
The preparation of financial statements requires Management to make
certain estimates and assumptions that affect the reported amounts
of assets and liabilities and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ
from those estimates.
X. Reclassifications
The FY 2018 financial statements were reclassified to conform to
the FY 2019 Departmental and OMB financial statement presentation
requirements. These reclassifications have no effect on total
assets, liabilities, net position, change in net position or
budgetary resources, as previously reported.
Y. Subsequent Events
Subsequent events and transactions occurring after September 30,
2019 through the date of the auditors’ opinion have been evaluated
for potential recognition or disclosure in the financial
statements. The date of the auditors’ opinion also represents the
date that the financial statements were available to be
issued.
Z. Classified Activities
Accounting standards require all reporting entities to disclose
that accounting standards allow certain presentations and
disclosures to be modified, if needed to prevent the disclosure of
classified information.
Bureau of Prisons These notes are an integral part of these
financial statements.
32
2. Non-Entity Assets
Non-entity assets are assets that are held by an entity but are not
available for use by the entity. Non-entity assets as of September
30, 2019 and 2018 are presented in the following table.
As of September 30, 2019 and 2018 2019 2018
Intragovernmental Fund Balance with Treasury $ 84,536 $
77,646
With the Public Accounts Receivable, Net 384 364 Total With the
Public 384 364 Total Non-Entity Assets 84,920 78,010 Total Entity
Assets 7,201,111 6,950,806 Total Assets $ 7,286,031 $
7,028,816
3. Fund Balance with Treasury
The Fund Balance with Treasury as reported in the financial
statements represents the unexpended cash balances in the BOP’s
accounting records for all the BOP Treasury Symbols as of September
30, 2019 and 2018. The Fund Balance with Treasury is presented in
the following table.
As of September 30, 2019 and 2018 2019 2018
Status of Fund Balances Unobligated Balance - Available $ 857,874 $
856,169 Unobligated Balance - Unavailable 336,632 147,588 Obligated
Balance not yet Disbursed 1,178,786 1,001,447 Non-Budgetary Fund
Balance with Treasury 84,133 77,235 Total Status of Fund Balances $
2,457,425 $ 2,082,439
Bureau of Prisons These notes are an integral part of these
financial statements.
33
Notes to the Principal Financial Statements
3. Fund Balance with Treasury (continued)
The Fund Balance with Treasury as reported in these financial
statements and notes has been adjusted to account for the
difference reported by Treasury. Routinely, two types of
differences arise. First, differences are created between the
accounting records of the BOP and Treasury because of the timing of
transaction inputs corresponding with cash receipts and
disbursements. Second, differences are created by data input errors
and remain until the necessary correcting entries are processed by
the BOP’s or Treasury’s accounting systems. The BOP operates a
decentralized accounting system with 111 agency location codes. Any
cause for reconciliation must be done individually by location. For
the Trust Fund, this amount represents the aggregate balance of the
Trust Fund’s cash accounts with Treasury under the account symbol
15X8408. This item also represents the total amount of all
obligated and unobligated undisbursed account balances with
Treasury as reflected in the Trust Fund’s records. The Trust Fund’s
general ledger balance for the Fund Balance with Treasury, before
any adjustments, was $3,501 thousand less than and $6,250 thousand
less than the actual amount reported by each of the BOP’s
accounting stations to Treasury as of September 30, 2019 and 2018,
respectively. Additionally, the Fund Balance with Treasury reflects
$4,402 and $4,686 thousand sequester balance for the fiscal years
ended September 30, 2019 and 2018, respectively, as requested by
OMB. This balance is unsuitable for obligation.
The unobligated balance for annual and multi-year budget authority
may be used to incur new obligations for the purpose specified by
the appropriation act. Annual and multi-year budget authority
expires at the end of its period of availability. During the first
through fifth expired years, the unobligated balance becomes
unavailable and may be used to adjust obligations and disbursements
that were recorded before the budgetary authority expired or to
meet a legitimate or bona fide need arising in the fiscal year for
which the appropriation was made. The unobligated balance for
no-year budget authority may be used to incur obligations
indefinitely for the purpose specified by the appropriation act.
No-year budget authority unobligated balances are still subject to
the annual apportionment and allotment process.
The total status of fund balances includes funds without budgetary
resources. Other funds without budgetary resources are composed of
prisoner monies held in trust by Treasury and certain receivables
and receipts of cash that are in suspense, clearing, deposit, or
general fund accounts.
4. Cash and Other Monetary Assets
Cash and Other Monetary Assets, as reported in the financial
statements, represent the total cash and cash equivalents under the
control of the BOP as of September 30, 2019 and 2018,
respectively.
Bureau of Prisons These notes are an integral part of these
financial statements.
34
4. Cash and Other Monetary Assets (continued)
As of September 30, 2019 and 2018 2019 2018
Cash Imprest Funds $ 402 $ 408
The BOP’s cash account is minimal given that the BOP does not, for
the most part, maintain cash in commercial bank accounts. The BOP’s
cash account consists of imprest funds totaling $402 and $408
thousand as of September 30, 2019 and 2018, respectively. All of
the listed amounts are available to pay current liabilities and
finance future authorized purchases.
5. Investments
The Trust Fund invests in non-marketable market-based Treasury
securities issued by the Bureau of the Fiscal Service. These
securities are purchased and redeemed at par value (the value at
maturity) exclusively through Treasury’s Finance and Funding
Branch, see Note 1.G. When securities are purchased, the investment
is recorded at par value. Premiums and/or discounts are amortized
through the end of the reporting period. As of September 30, 2019
and 2018, all Trust Fund security investments have matured.
Therefore, the respective investment balances are zero.
6. Accounts Receivable, Net
Accounts Receivable represents the amounts due to the BOP as of
September 30, 2019 and 2018, respectively, as shown in the
following table. The Intragovernmental accounts receivable balance
consists of refunds and reimbursements with Federal entities deemed
fully collectable. The majority of the accounts receivable balance
with the Public is billings to state municipalities in relation to
the housing of non-Federal inmates.
As of September 30, 2019 and 2018
Intragovernmental Accounts Receivable $
4,063 6,536 $
9,863 16,143
Bureau of Prisons These notes are an integral part of these
financial statements.
35
Notes to the Principal Financial Statements
7. Inventory and Related Property, Net
The Trust Fund Commissary inventory purchased for resale as of
September 30, 2019 and 2018 is presented in the following
table.
As of September 30, 2019 and 2018
Inventory Inventory Purchased for Resale $
2019
19,486 $
2018
19,011
8. General Property, Plant and Equipment, Net
PP&E, as reported in the financial statements, are recorded at
the acquisition cost net of accumulated depreciation as of
September 30, 2019 and 2018, respectively. See Note 1.J for method
of depreciation, capitalization thresholds, and useful lives.
As of September 30, 2019 Acquisition Accumulated Net Book Useful
Cost Depreciation Value Life
Land and Land Rights $ 172,423 $ - $ 172,423 N/A Construction in
Progress 112,924 - 112,924 N/A Buildings, Improvements, and
Renovations 10,265,683 (6,127,632) 4,138,051 2-30 yrs Other
Structures and Facilities 953,139 (707,705) 245,434 20 yrs Vehicles
87,007 (76,702) 10,305 6-10 yrs Equipment 182,141 (110,646) 71,495
10 yrs Assets Under Capital Lease 89,652 (87,560) 2,092 5-30 yrs
Leasehold Improvements 120,909 (90,739) 30,170 2-20 yrs Internal
Use Software 28,425 (27,511) 914 5-7 yrs Total $ 12,012,303 $
(7,228,495) $ 4,783,808
Bureau of Prisons These notes are an integral part of these
financial statements.
36
8. General Property, Plant and Equipment, Net (continued)
As of September 30, 2018 Acquisition Accumulated Net Book Useful
Cost Depreciation Value Life
Land and Land Rights $ 172,423 $ - $ 172,423 N/A Construction in
Progress 70,954 - 70,954 N/A Buildings, Improvements, and
Renovations 10,072,408 (5,798,460) 4,273,948 2-30 yrs Other
Structures and Facilities 943,074 (677,231) 265,843 20 yrs Vehicles
87,940 (73,528) 14,412 6-10 yrs Equipment 154,745 (102,844) 51,901
10 yrs Assets Under Capital Lease 89,652 (68,732) 20,920 5-30 yrs
Leasehold Improvements 102,633 (87,601) 15,032 2-20 yrs Internal
Use Software 28,425 (26,276) 2,149 5-7 yrs Total $ 11,722,254 $
(6,834,672) $ 4,887,582
Leasehold improvements reflect capital improvements made to
facilities occupied but not owned by the BOP. Capital improvements
made to buildings and other structures owned by the BOP are
reflected as buildings and other structures and facilities.
9. Other Assets
Intragovernmental assets consist of advances to the Department of
Transportation for transit subsidy benefits and advances to the
Department of Justice for computer equipment. The amounts as of
September 30, 2019 and 2018 are presented in the following
table.
As of September 30, 2019 and 2018 2019 2018
Intragovernmental Advances and Prepayments $ 9,356 $ 13,778
Bureau of Prisons These notes are an integral part of these
financial statements.
37
10. Liabilities not Covered by Budgetary Resources
Liabilities not covered by budgetary resources are liabilities for
which Congressional action is needed before budgetary resources can
be provided. These liabilities as of September 30, 2019 and 2018,
respectively, are presented in the following table.
As of September 30, 2019 and 2018 2019 2018
Intragovernmental Accrued FECA Liabilities $ 172,286 $ 169,460
Other Unfunded Employment Related Liabilities 366 528 Other 9,249
1,700
Total Intragovernmental 181,901 171,688
With the Public Federal Employee and Veteran Benefits 1,115,065
1,134,980 Accrued Annual and Compensatory Leave Liabilities 185,722
173,093 Environmental and Disposal Liabilities (Note 11) 71,152
71,156 Contingent Liabilities (Note 14) 13,535 44,599 Capital Lease
Liabilities (Note 12) - 38 Other 381,937 313,339
Total With the Public 1,767,411 1,737,205 Total Liabilities not
Covered by Budgetary Resources 1,949,312 1,908,893 Total
Liabilities Covered by Budgetary Resources 692,264 639,661 Total
Liabilities not requiring Budgetary Resources 86,406 86,584 Total
Liabilities $ 2,727,982 $ 2,635,138
11. Environmental and Disposal Liabilities
The BOP operates 122 facilities in over 30 States and Territories
and is subject to rigorous Federal, state, and local environmental
regulations applicable to the facility locations. Per SFFAS No. 5,
Accounting for Liabilities of the Federal Government, and SFFAS No.
6, Accounting for Property, Plant, and Equipment, Federal agencies
are required to recognize liabilities for environmental clean-up
costs when the future outflow or sacrifice of resources is probable
and reasonably estimable. The BOP exercises due care in determining
the presence of contamination through regularly scheduled testing
as required by the BOP Facilities Management Policy. If, as a
result of the testing, environmental contamination is detected on
the BOP owned property or on non-BOP property but the BOP is
determined to be the agent of the contamination, the BOP will clean
up the contamination as soon as possible. The liability is
recognized immediately.
Bureau of Prisons These notes are an integral part of these
financial statements.
38
Notes to the Principal Financial Statements
11. Environmental and Disposal Liabilities (continued)
As environmental-related clean-up costs are accomplished, the prior
established liability will be reduced. Additionally, estimates will
be revised periodically to account for material changes due to
inflation, deflation, technology, or applicable laws and
regulations. Any material changes in the estimated total clean-up
costs will be expensed when re-estimates occur and the liability
balance adjusted.
Firing Ranges The BOP operates firing ranges on 65 of the sites
where its institutions are located. Use of these firing ranges
generates waste consisting primarily of lead shot and spent rounds
from rifles, shotguns, pistols, and automatic weapons. At
operational firing ranges, lead-containing bullets are fired and
eventually fall to the ground at or near the range. As of September
30, 2018, BOP Management determined their estimated clean-up
liability to be $30,612 thousand. In FY 2019, BOP Management
adjusted the estimated clean-up liability by the current U.S.
inflation rate as determined by Treasury and as such determined
that an estimated firing range clean-up liability of $31,277
thousand, based on an inflation rate of 2 percent, should be
recorded. In FY 2019, the liability cost for firing ranges
increased by $665 thousand.
Asbestos Section 112 of the Clean Air Act requires the U.S.
Environmental Protection Agency (EPA) to develop and enforce
regulations to protect the general public from exposure to airborne
contaminants that are known to be hazardous to human health. On
March 31, 1971, the EPA identified asbestos as a hazardous
pollutant, and on April 6, 1973, the EPA first promulgated the
Asbestos National Emissions Standards for Hazardous Air Pollutants
(NESHAP).
The BOP conducted a review of 46 institutions that were built prior
to 1980; the review provided an estimate of the extent of friable
and non-friable Asbestos Containing Materials (ACM) remaining in
each of the institutions as of October 30, 2009. As of September
30, 2018, BOP Management determined their estimated clean-up
liability to be $40,544 thousand. In FY 2019, BOP Management
decreased the clean-up liability in the amount of $1,549 thousand
for the abatement of asbestos at 9 locations. In addition, BOP
Management increased the clean-up liability in the amount of $880
thousand by the current U.S. inflation rate of 2 percent as
determined by Treasury. In FY 2019, BOP Management recorded a
clean-up liability in the amount of $39,875 thousand, a $669
thousand decrease in liability cost for asbestos from the previous
year.
Bureau of Prisons These notes are an integral part of these
financial statements.
39
Notes to the Principal Financial Statements
11. Environmental and Disposal Liabilities (continued)
These liabilities as of September 30, 2019 and 2018, respectively,
are presented in the following table.
As of September 30, 2019 and 2018 2019 2018
Firing Ranges Beginning Balance, Brought Forward $ 30,612 $
29,724
Inflation Adjustment 665 888 Total Firing Range Liability 31,277
30,612
Asbestos Beginning Balance, Brought Forward $ 40,544 $ 40,072
Abatements (1,549) (704) Inflation Adjustment 880 1,176
Total Asbestos Liability $ 39,875 $ 40,544 Total Environmental and
Disposal Liabilities $ 71,152 $ 71,156
12. Leases
Capital Leases
The two tables that follow represent a 25-year capital lease for a
Federal Transfer Center in Oklahoma City. The lease agreement,
which expires in FY 2020, calls for semi-annual payments of $4.5
million for 20 years; the last five years (lease years 21 through
25) are land rental payments only. The BOP paid the remaining total
of $38 thousand in payments during the fiscal year ended September
30, 2019.
As of September 30, 2019 and 2018
With the Public
Summary of Assets Under Capital Lease Land and Buildings
Accumulated Amortization
Total Assets Under Capital Lease
$
$
89,652 (68,732) 20,920
Bureau of Prisons These notes are an integral part of these
financial statements.
40
12. Leases (continued)
Future Capital Lease Payments Due Land and
Fiscal Year Buildings FY 2019 Net Capital Lease Liabilities - FY
2018 Net Capital Lease Liabilities 38
2019 2018 Net Capital Lease Liabilities not Covered by
Budgetary Resources $ - $ 38
Operating Leases
The following table represents the total of future noncancelable
operating lease payments. The totals are comprised of five
operating leases, with locations in California, Colorado,
Pennsylvania and Texas.
As of September 30, 2019
Intragovernmental
2020 3,098 2021 1,891 2022 659 2023 488 2024 354
After 2024 354 Total Future Noncancelable Operating
Lease Payments $ 6,844
Bureau of Prisons These notes are an integral part of these
financial statements.
41
13. Other Liabilities
Other liabilities as of September 30, 2019 and 2018, totaled $531
and $450 million, respectively. The majority of Intragovernmental
Other Liabilities are composed of tenant allowances for operating
leases, monies received from prisoner funds, and certain receipts
of cash that are in suspense, clearing, deposit, or general fund
accounts that are owed to Treasury. The majority of other
liabilities with the public are composed of future funded energy
savings performance contracts and utilities. All other liabilities
are current and are presented in the following table.
As of September 30, 2019 and 2018 2019 2018
Intragovernmental Other Accrued Liabilities $ 66 $ - Employer
Contributions and Payroll Taxes Payable 53,056 47,606 Other
Post-Employment Benefits Due and Payable 946 741 Other Unfunded
Employment Related Liabilities 366 528 Liability for Non-Entity
Assets Not Reported
on the Statement of Custodial Activity 351 337 Other Liabilities
9,249 1,700
Total Intragovernmental 64,034 50,912
With the Public Other Accrued Liabilities 7,164 7,128 Advances from
Others 668 7,871 Liability for Nonfiduciary Deposit Funds and
Undeposited Collections 84,570 77,674 Capital Lease Liabilities -
38 Other Liabilities 374,773 306,211 Total With the Public 467,175
398,922 Total Other Liabilities $ 531,209 $ 449,834
14. Contingencies and Commitments
Contingencies include various administrative proceedings, legal
actions, and claims related to contract disputes and employee and
inmate claims; see Note 1.M for more details. For legal actions
where Management and the Chief Counsel consider adverse decisions
“probable” or “reasonably possible” and the amounts are reasonably
estimable, information is disclosed below. The amounts as of
September 30, 2019 and 2018 are presented in the following
table.
Bureau of Prisons These notes are an integral part of these
financial statements.
42
14. Contingencies and Commitments (continued)
As of September 30, 2019
Legal Contingencies: Probable Reasonably Possible
As of September 30, 2018
Probable Reasonably Possible
$ 13,535 $ 22,670 14,475 43,590
$44,599 $72,804 4,500 80,200
15. Funds from Dedicated Collections
In 1930, DOJ Circular No. 2126 granted the BOP authority to
establish prisoner trust fund and commissary accounts. The Trust
Fund is a self-sustaining trust revolving fund account that is
funded through the sale of goods and services to inmates. The Trust
Fund receives no appropriated funds. Funding